The stock market fell more than 1,000 points on Monday, in one of its biggest drops since the coronavirus pandemic shut down the economy, before recovering Tuesday morning.
In morning trading on Tuesday, the S&P 500 stock index rose more than 60 points, or 1.3%, while the Dow Jones Industrial Average rose more than 300 points and the Russell 2000 index of smaller U.S. companies rose 1%.
Technology stocks remained volatile after Monday’s selloff, but some were back in positive territory.
Apple shares fell more than 3%, while Nvidia shares rose more than 4% and Microsoft shares rose more than 2%.
Meta Platforms shares rose more than 3 percent, while Amazon’s shares hovered near Monday’s closing price of about $161 a share.
Stocks fell sharply on Monday after the Labor Ministry released weaker-than-expected employment data on Friday and a stronger yen led to increased selling pressure.
The unemployment rate rose to 4.3% in July from 4.1% in June, and the number of employed people increased by 114,000, well below the 175,000 that economists had been expecting.
The rising unemployment rate has triggered a recessionary indicator called Samrule, which predicts an economic downturn when the three-month moving average of the unemployment rate rises by more than half a percentage point from its recent low.
The inventor of the Thermleur, Claudia Therm, He told Bloomberg He said Monday that he believes the United States is “worrisomely close” to a recession.
Monday’s stock market sell-off was further fueled by Wall Street’s “carry trades” — transactions in which stocks are bought with money borrowed in currencies weaker than the dollar, specifically the Japanese yen.
“The Bank of Japan raised short-term interest rates at its July 31 meeting, which led to a strengthening of the yen, which in turn led to the unwinding of large speculative carry trades,” investor Ed Yardeni, president of Yardeni Research, told The Hill.
